Quentin Stobart Haines; ; And; National Standards Committee (No 1)
[2024] NZHC 2960
•11 October 2024
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV 2022-485-000294
[2024] NZHC 2960
UNDER The Lawyers and Conveyancers Act 2006 IN THE MATTER
of an appeal against a decision of the
Lawyers and Conveyancers Disciplinary Tribunal
BETWEEN
QUENTIN STOBART HAINES
Appellant
AND
NATIONAL STANDARDS COMMITTEE (NO 1)
Respondent
On the papers Appearances:
Appellant in person (submissions) and D Evans for the Appellant (submissions in reply)
R B Moon for the Respondent
Judgment:
11 October 2024
JUDGMENT OF TAHANA J
[Leave to appeal]
This judgment was delivered by me on 11 October 2024 at 1.00pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors:
Aspire Legal, WellingtonR B Moon, Barrister, Wellington
HAINES v NATIONAL STANDARDS COMMITTEE (NO 1) [Leave to appeal] [2024] NZHC 2960 [11
October 2024]
Introduction
[1] Mr Haines seeks leave to appeal my 30 October 2023 decision1 dismissing his appeal of a decision of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal (the Tribunal).2 The respondent opposes the application.
[2] Mr Haines argues that leave should be granted because my decision erred in law by:
(a)making findings without first establishing the accuracy of the evidence; and
(b)making findings when there was an insufficient evidential basis for those findings.
[3] I must therefore determine whether leave should be granted to Mr Haines to appeal. Before determining that issue, I set out the relevant law.
Relevant law
[4] Section 254 of the Lawyers and Conveyancers Act 2006 prescribes when a party may appeal a decision of the High Court:
(1)Any party to an appeal under section 253(1) who is dissatisfied with any determination of the High Court in the proceedings as being erroneous in point of law may, with the leave of that court, or, if the High Court refuses leave, with the leave of the Court of Appeal, appeal to the Court of Appeal against the determination; and section 56 of the Senior Courts Act 2016 applies to any such appeal.
(2)In determining whether to grant leave to appeal under this section, the Court of Appeal must have regard to whether the question of law involved in the appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for its decision.
1 Haines v National Standards Committee (No.1) [2023] NZHC 3039.
2 National Standards Committee v Haines [2022] NZLCDT 10.
[5] The parties accept that s 254 applies in determining whether leave should be granted and refer to Reid v New Zealand Law Society as setting out the relevant principles:3
(a)Leave to appeal may be granted only where the appeal raises one or more questions of law capable of bona fide and serious argument and the case involves some interest, public or private, of sufficient importance to outweigh the costs and delay of a further appeal. Ultimately the question is whether a grant of leave is in the interests of justice.
(b)The applicant must be able to demonstrate that the alleged error or errors of law are sufficiently important to justify a second appeal.
(footnotes omitted)
Should leave to appeal be granted?
[6]I start with my conclusion and then set out my reasons.
[7] I am not satisfied that Mr Haines’ grounds of appeal raise any question of law capable of bona fide and serious argument. The grounds of appeal do not raise serious arguments that the Court made findings based on inaccurate evidence or insufficient evidence for the reasons explained when considering each ground. Further, the grounds of appeal do not raise any interest of sufficient importance to outweigh the costs and delay of a further appeal as they turn on an assessment of evidence and not on matters of public interest. Ultimately, it is not in the interests of justice to grant leave to appeal. My reasons for this conclusion are set out below.
Accuracy of evidence
[8] Mr Haines argues that the Tribunal put inaccurate evidence before the Court, being evidence that Mr Haines owed C money. He submits that this Court upheld the Tribunal’s finding that Mr Haines owed money to C, which was an error of law.
[9] In my decision, I noted Mr Haines’ position regarding C and the reasons why I rejected Mr Haines’ submission that the payments were made for work done, as follows:
3 Reid v New Zealand Law Society [2024] NZHC 411 at [5].
[140] There is no dispute that C made payments into Mr Haines’ personal bank account. Mr Haines on his own evidence, acknowledged that he received funds and needed to repay $55,000 to C (which he never did and refers to C receiving a payment from Simpson & Co’s insurer to justify his non-payment). Mr Haines submits that the payments were made for work done. That however, does not explain the $55,000 still owing to C.
[141] Mr Haines says that C knew that he was paying funds to Mr Haines’ bank account. This was rejected by the Tribunal who preferred C’s evidence that he paid the funds into the account provided by Mr Haines. C was not aware that the account was not for the relevant law firms. Further, even if C had such knowledge this does not excuse Mr Haines’ conduct in receiving funds directly into his personal bank account.
[142] Mr Haines then disputes that there was a loan from C and refers to the various narrations when funds were transferred and says they indicate that the payments relate to legal fees and not any loan.
[143] The records of the transactions show that on 5 March 2018, $45,000 was deposited into Mr Haines’ account with the narration “Funds Manager Haines Lega[l]”. The $45,000 was paid by way of nine payments of $5,000. C’s evidence was that Mr Haines was in financial difficulty and had asked for a loan. The use of the words “Funds Manager Haines Lega[l]” can be contrasted with other payments having the narration “Quentin Haines Legal Fee” or “Q Haines Legal On A/c”. There is one payment with the narration “Loan (KH [C] Legal Fees)”. The narrations, and the fact that Mr Haines acknowledged he needed to repay $55,000, indicate that it is likely that C lent funds to Mr Haines and that the funds were not for the payment of legal fees (and if they were, they should not have been paid into a personal bank account). The fact that the accountant, Mr Rohloff, made payments on behalf of C is irrelevant and does not support Mr Haines’ contention that C knew he was paying Mr Haines directly.
[10] The finding that Mr Haines owed money to C was based on Mr Haines’ own admission to this effect. The above passage (at [140]) acknowledges Mr Haines’ justification for not repaying the sum owed to C. The reference to funds “still” owing was in response to Mr Haines’ submission that the funds were advanced for work done. The issue before the Court was the conduct of Mr Haines in borrowing money from his client C and not whether C had been able to recover the monies from Mr Haines or Simpson & Co’s insurers. This Court did not make findings as to whether C had been able to recover the monies and expressly acknowledged Mr Haines’ position in this regard.
[11] If Mr Haines takes issue with the Tribunal’s decision regarding penalty, the appropriate course is to appeal that decision.
[12] I therefore do not consider that this ground of appeal raises a question of law capable of bona fide and serious argument.
Sufficiency of evidence
[13] Mr Haines submits that there was insufficient evidence to support my findings regarding his failure to update the letter of engagement with M, over-charging M, misleading the court in relation to the fees owed by M and having a conflict of interest with M. I consider each ground in turn.
Charge one (M) — terms of engagement
[14] Mr Haines submitted that I misstated the evidence and refers to the following passage from my judgment:
[35] The standard terms attached to the engagement letter refer to QH Law sending interim invoices “usually” monthly and on completion or termination of the engagement. The agreement to invoice monthly was therefore inaccurate in a material respect as Mr Haines was not entitled to invoice monthly under his arrangement with M. In those circumstances, Mr Haines should have updated the engagement letter to reflect the actual fee agreement. That was a breach of r 3.6.
[15] Mr Haines’ submissions do not refer to the preceding and subsequent paragraphs explaining why the terms of engagement should have been updated, as follows:
[30] The standard terms of engagement attached to the April 2017 engagement letter provided that:
2.4 Invoices: We will send interim invoices to you, usually monthly and on completion of the matter, or termination of our engagement. We may also send you an invoice when we incur a significant expense.
[31] Mr Haines says there was no need to update the engagement letter because the arrangement was that no invoice would be issued until the end of the retainer. In those circumstances, there was no material change to the engagement terms.
[32] Mr Haines gave evidence that he had agreed with M that he would not invoice until there were funds to pay or “milestones, windfalls, [or] when [M] had money.” He accepted that it was an “agreement to agree.” He also accepted that the engagement letter did not capture the fact he would not invoice and would extend credit.
[33] The Tribunal found that there was no evidence any milestones were ever agreed or that the varied fee arrangements were ever properly recorded, certainly not in a manner that would have allowed M to provide his agreement.
[34] The Tribunal rejected M’s contention that he and Mr Haines agreed that he would only pay if he obtained a successful costs award.
…
[36] I do not consider that policy or practical considerations support finding in favour of Mr Haines because the agreement here was not simply an ongoing offer to provide credit. If that was the agreement then Mr Haines would have continued to be entitled to invoice monthly, but he clearly was not under the terms of the agreement Mr Haines accepted with M.
[37] I agree that Mr Haines’ failure to update the engagement letter constitutes unsatisfactory conduct under s 12 of the Act in that it is conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer. It was also conduct that would be regarded by lawyers of good standing as being unacceptable and unprofessional.
[16] I reject Mr Haines’ submission that there is a question of law capable of serious argument because Mr Haines did not in fact send a monthly invoice. Solicitors are required to, in advance, provide in writing, information on the principal aspects of client service4 and if that information becomes inaccurate in a material respect, ensure that the information is updated with due expedition.5 The issue was whether the terms of engagement were inaccurate by authorising monthly invoicing when Mr Haines had agreed with M that fees would only be payable on achievement of milestones, windfalls, or when M had funds. Whether Mr Haines invoiced monthly is irrelevant to that issue.
[17] The finding as to the varied fee arrangements provided an evidential foundation to support a finding that a reasonably competent lawyer would have updated the terms of engagement to remove any right to invoice monthly. This ground of appeal does not raise a question of law capable of bona fide and serious argument.
4 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 3.4.
5 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 3.6.
Charge two (M) — charging a fee that exceeded a fair and reasonable amount
[18] Mr Haines argues that the Court erred in finding that he had charged M a fee that exceeded a fair and reasonable amount by referring to the decision in [redacted].6 Mr Haines submitted that this constituted an error of law by reason of s 50 of the Evidence Act 2006:
50 Civil judgment as evidence in civil or criminal proceedings
(1)Evidence of a judgment or a finding of fact in a civil proceeding is not admissible in a criminal proceeding or another civil proceeding to prove the existence of a fact that was in issue in the proceeding in which the judgment was given.
(1A) Evidence of a decision or a finding of fact by a tribunal is not admissible in any proceeding to prove the existence of a fact that was in issue in the matter before the tribunal.
(2)This section does not affect the operation of—
(a)a judgment in rem; or
(b)the law relating to res judicata or issue estoppel; or
(c)the law relating to an action on, or the enforcement of, a judgment.
[19] The respondent notes that the decision in [redacted] was handed up by Mr Haines’ counsel with the consent of the respondent. The respondent refers to s 9 of the Evidence Act, which allows the judge to admit evidence with the agreement of both parties. The respondent argues that Mr Haines cannot now be permitted to rely on s 50(1) to exclude the decision.
[20] Further, the respondent notes that the decision was not before the Tribunal as the original fact finder nor was it determinative of any findings against Mr Haines.
[21] At [42] to [53] of my judgment I set out the Tribunal’s findings and reasoning in determining that the fee charged was not fair and reasonable. At [49], I agreed with the Tribunal’s observation as to the relevance of the transcript of Mr Haines’ meeting with M in supporting the finding that the fee had not been set with regard to the requirements of the relevant rule.
6 [Redacted].
[22] At [54] of my judgment, in circumstances where Mr Haines’ counsel had referred to the decision in [redacted], I noted that the Associate Judge “like the Tribunal” was not satisfied that $500 was a fair and reasonable fee.
[23] Mr Haines submits that this Court relied on the findings in [redacted] to reject the calculations of Mr McMenamin and failed to consider Mr McMenamin’s view that it is open to the Committee to conclude that the amount of time was generally reasonable.
[24] At [45] of my judgment, I explained that Mr McMenamin’s report was reliant on Mr Haines’ reconstruction of the time spent and why this was inconsistent with a contemporaneous email and the transcript of his meeting with M.
[25] I therefore reject Mr Haines’ submission that my finding as to Mr McMenamin’s report was dependent on the decision in [redacted].
[26] The findings in [redacted] were only relevant insofar as they supported the findings of the Tribunal. Mr Haines’ counsel had referred to that decision and it was therefore open to the Court to refer to the findings in that case. The findings as to Mr Haines’ conduct were not dependent on the findings in [redacted].
[27] It follows that this ground of appeal does not raise a question of law capable of bona fide and serious argument.
Charge three (M) — charging for an ulterior purpose
[28] Mr Haines argues that my finding that he had misled the Court in M’s bankruptcy proceedings constitutes an error of law because the finding relied on a transcript of a meeting that was not before the Court in that proceeding. Mr Haines argues that only the documents before the Court in the bankruptcy proceedings are relevant.
[29] I reject this submission because the transcript is evidence of Mr Haines’ intentions regarding the value of the legal fees. It is evidence that is relevant to whether the legal fees attached to M’s affidavit (which was submitted to the Court) are
accurate and genuine. I reject Mr Haines’ submission that because the fee did not constitute gross over billing, it could not mislead the Court.
[30] Mr Haines’ submission seeks to exclude admissible evidence as to his knowledge and intentions when he issued the invoices to M. That is relevant to the accuracy of the invoices and Mr Haines’ knowledge in allowing the inflated invoices to be submitted in the bankruptcy proceedings.
[31] The transcript was relevant to the bona fides of Mr Haines’ conduct in providing invoices for the value claimed. It follows that I am not satisfied that this ground of appeal raises a question of law capable of bona fide and serious argument.
Charge four (M) — conflict of interest
[32] Mr Haines submitted that the Court has taken an “overly technical approach” to the question of conflict of interest and in doing so has failed to correctly identify the actual conduct of Mr Haines based on his knowledge at the time.
[33] Mr Haines argues that there has been an error of law by the Court failing to consider the principles in Duncan v Medical Practitioners Disciplinary Committee.7 Mr Haines’ submissions do not explain what those principles are or how they have been contravened.
[34] The decision in Duncan concerned a judicial review application. The Preliminary Proceedings Committee of the Medical Council (the Committee) appealed against the High Court’s finding8 that the Committee’s decision to frame a single charge of disgraceful conduct supported by seven particulars of separate complaints was invalid. The High Court ordered the Committee to reconsider the seven complaints and frame an appropriate charge in respect of each separate complaint. The Committee appealed.
7 Duncan v Medical Practitioners Disciplinary Committee [1986] 1 NZLR 513 [Court of Appeal decision].
8 Duncan v Medication Practitioners Disciplinary Committee [1986] 1 NZLR 513 [High Court decision].
[35]The Court of Appeal held that:9
Whether a broad allegation, or any narrower separate ones, is or are established will depend on the findings of fact reached by the Council and the Council’s assessment of gravity, which if adverse will be open to appeal by the practitioner to the High Court.
…
When there are a number of separate charges, it will normally be the responsibility of the Council to consider the evidence relating to each separately, entirely uninfluenced by the evidence on others, and to make separate findings on each.
[36] Mr Haines’ submission is unclear as to how the above principles have been contravened other than to assert that the Court failed to identify the conduct of Mr Haines.
[37]In my judgment I held that:
[78] Mr Haines’ failure to advise M to seek independent legal advice in relation to the Advances and the Servicing Term, and the fact that Mr Haines was continuing to act for him in bankruptcy proceedings contravened r 5.4.4. Mr Haines should not have acted for M in the bankruptcy proceedings in circumstances where he had an interest as a creditor and that interest did not correspond with M’s in all respects and was therefore in contravention of r 5.4.2.
[38] The above passage identifies the contravening conduct. It is unclear how this is “overly technical” given the obvious conflict of interest in lending money to a client and continuing to advise the client in their bankruptcy proceedings.
[39] I agree with the respondent that this ground of appeal does not raise a question of law capable of bona fide and serious argument.
Do the grounds of appeal raise any question of law of general or public importance?
[40] If I am wrong in determining that the grounds of appeal do not raise any question of law capable of bona fide or serious argument, I briefly consider whether the appeal raises issues of general or public importance.
9 Court of Appeal decision, above n 7, at 546–547.
[41] Mr Haines refers to the respondent’s submissions in relation to a separate application for name suppression. In that context, the respondent submitted that there was a public interest in the penalty from third parties involved in other litigation with Mr Haines.
[42] The relevant question here is whether the grounds of appeal raise issues of public or general interest. The grounds of appeal turn on the Court’s assessment of the evidence and not on the level of penalty (which was not the subject of my decision). The Court’s assessment of the evidence does not raise any issue of general or public interest.
Result
[43]I decline to grant leave to appeal.
[44]The respondent is entitled to costs on a 2B basis.
Tahana J
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